ADM has been commenting on the project for the last year in articles and editorials (see the March edition for the latest details on the project) and the news hardly comes as a surprise to those familiar with the program.

“Defence has cancelled contract negotiations with the preferred tenderer because it became clear that the company was not going to deliver what Defence had assessed it had promised,” a Defence spokesman told the SMH.

As reported in ADM’s July 2010 edition it seems to be an open secret that the winning bidder was Melbourne based Point Trading which offered the Heckler & Koch Grenade Machine Gun with a Norwegian-made Vinghogs FCS and a thermal weapon site supplied by BAE Systems in the US.The other shortlisted contender, Brisbane-based Nioa Defence, is the agent for US firm General Dynamics and offered GD’s Mk47 lightweight Automatic Grenade Launcher (AGL), dubbed the Striker 40, along with a fully compliant FCS and the only air burst 40mm ammunition that’s actually qualified and in service.

ADM understands that the Point Trading solution was not fully compliant with the tender documentation and this was borne out in negotiations that have been ongoing since the tender closed in October 2007.

The spokesman said Defence was working out the best way to give troops automatic grenade launchers and might turn to the off-the-shelf weapons used by allies in Afghanistan.